Foxconn Technology Group will pay ¥389 billion (US$3.43 billion) for a 66 percent stake in Sharp, the two companies said Wednesday.

The deal gives Foxconn access to a captive market for its assembly services -- but also to a broad range of electronic components and consumer devices that could allow it to take a larger share of the value added between design and delivery.

For years, Sharp was a household name for its TVs, but it also sells printers, projectors, phones and point-of-sale systems. Foxconn's majority ownership of Sharp will put it into competition with some of its own customers.

Sharp also makes many of the components in those products, including LCD panels, power supplies, radio receivers and image sensors, and sells them to other manufacturers too. The deal will give Foxconn more control over its supply chain.

It pioneered the use of IGZO (indium gallium zinc oxide) to make brighter LCD displays, a technology that Apple was repeatedly rumored, with each new generation of iPhone, to be ready to adopt, but never quite seemed to get around to.

The head of Sharp's LCD unit, Tetsuo Onishi, isn't waiting for a Foxconn-led turnaround: Sharp announced Monday that he will leave Thursday, the last day of the company's fiscal year.

When Sharp gets around to reporting its full-year results, they are likely to make grim reading. President and CEO Kozo Takahashi said Tuesday that the company is considering lowering its financial results estimates for the year to March 31 due to a decline in sales, particularly in China.

As a cost-cutting measure, in mid-February the company extended for another year the salary reductions (5 percent for managers, 2 percent for other employees) that it introduced in the middle of last year.

The poor performance and the need to cut costs almost derailed the deal with Foxconn, which by late February was all but sealed. On Feb. 25, Sharp announced that its board had agreed to issue 3.28 billion new ordinary shares at ¥118 per share, and 8.62 million non-voting shares at ¥11,800 per share, in return for a payment of around ¥489 billion from Foxconn.

Almost immediately, Japanese media reported that Foxconn had put the deal on hold while it assessed Sharp's disclosure that it had up to ¥300 billion in contingent liabilities.

That assessment ultimately led Foxconn to wipe more than a quarter off the value of its bid, and hold out for the right to convert each non-voting shares into 100 voting ones next year.

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